1.  Basis of Preparation of Financial Statements:
 
 The Financial Statements have been prepared under the historical cost
 convention on accrual basis. The mandatory applicable accounting
 standards in India and the provisions of the Companies Act, 1956 have
 been followed in preparation of these financial statements.
 
 2.  Fixed Assets:
 
 Fixed assets are stated at cost of acquisition and installation less
 accumulated depreciation. Cost is inclusive of freight, duties, levies
 and any directly attributable cost of bringing the assets to their
 working condition for intended use.
 
 Asset retirement obligations are capitalized based on a constructive
 obligation as a result of past events, when it is probable that an
 outflow of resources will be required to settle the obligation and a
 reliable estimate of the amount can be made. Such costs are depreciated
 over the remaining useful life of the asset.
 
 3.  Expenditure during pre-operative period of license:
 
 Expenses incurred on project and other charges during construction
 period are included under pre-operative expenditure (grouped under
 Capital Work in Progress) and are allocated to the cost of Fixed Assets
 on the commencement of commercial operations.
 
 4.  Depreciation and Amortisation:
 
 Depreciation on fixed assets is provided on straight-line method
 (except stated otherwise) on the basis of estimated useful economic
 lives as given below: -
 
 i) Cost of Rights, Licences including the fees paid on fixed basis
 prior to revenue share regime and Spectrum fee is amortised on
 straight-line method on commencement of operations over the validity
 period.
 
 ii) Software, which is not an integral part of Hardware, is treated as
 Intangible asset and is amortized over their useful economic lives as
 estimated by the management between 3 to 5 years.
 
 iii) Bandwidth / Fibre taken on Indefeasible Right of Use (IRU) is
 amortised over the agreement period.
 
 Assets costing upto Rs. 5,000/- are depreciated fully in the month of
 purchase.
 
 5.  Inventories:
 
 Inventories are valued at cost or net realisable value, whichever is
 lower. Cost is determined on weighted average basis.
 
 6.  Foreign currency transactions:
 
 Transactions in foreign currency are recorded at the exchange rates
 prevailing at the dates of the transactions.  As per the transitional
 provisions given in the notification issued by Ministry of Corporate
 Affairs dated 31st March, 2009, the company has opted for the option of
 adjusting the exchange difference on long term foreign currency
 monetary items to the cost of the assets acquired out of these foreign
 currency monetary items. The company has aligned its accounting policy
 based on this notification.
 
 Exchange difference arising out of fluctuation in exchange rates on
 settlement / period end is accounted based on the nature of transaction
 as under:
 
 1) Short term foreign currency monetary assets and liabilities:
 recognised in the Profit and Loss account.
 
 2) Long term foreign currency monetary liabilities used for acquisition
 of fixed assets: adjusted to the cost of the fixed assets and amortised
 over the remaining useful life of the asset.
 
 3) Other long term foreign currency monetary liabilities: recognised in
 Foreign Currency Monetary Item Translation Difference Account and
 amortised over the period of liability not exceeding 31st March, 2012.
 
 7.  Taxation:
 
 a) Current Tax: Provision for current income tax is made on the taxable
 income using the applicable tax rates and tax laws.
 
 b) Deferred Tax: Deferred tax arising on account of timing differences
 and which are capable of reversal in one or more subsequent periods is
 recognised using the tax rates and tax laws that have been enacted or
 substantively enacted. Deferred tax assets are not recognised unless
 there is virtual certainty with respect to the reversal of the same in
 future years.
 
 c) Minimum Alternative Tax (MAT) credit: MAT credit is recognised as an
 asset only when and to the extent there is convincing evidence that the
 Company will pay normal income tax during the specified period. In the
 year in which the MAT credit becomes eligible to be recognized as an
 asset in accordance with the recommendations contained in Guidance Note
 issued by the ICAI, the said asset is created by way of a credit to the
 Profit and Loss account and shown as MAT credit entitlement. The
 Company reviews the same at each balance sheet date and writes down the
 carrying amount of MAT credit entitlement to the extent there is no
 longer convincing evidence to the effect that Company will pay normal
 income tax during the specified period.
 
 8.  Retirement Benefits:
 
 Contributions to Provident and Pension funds are funded with the
 appropriate authorities and charged to the Profit and Loss Account.
 
 Contributions to superannuation are funded with the Life Insurance
 Corporation of India and charged to the profit and loss account.
 
 Liability for gratuity as at the year end is provided on the basis of
 actuarial valuation and funded with Life Insurance Corporation of
 India.
 
 Provision in accounts for leave benefits to employees is based on
 actuarial valuation done by projected accrued benefit method at the
 period end.
 
 9.  Revenue Recognition and Receivables:
 
 Revenue on account of telephony services (mobile & long distance) and
 sale of handsets and related accessories is recognized net of rebates,
 discount, service tax etc. on rendering of services and supply of goods
 respectively.  Recharge fees on recharge vouchers is recognized as
 revenue as and when the recharge voucher is activated by the
 subscriber.
 
 Service income from passive infrastructure is recognized on accrual
 basis (net of reimbursements) as per the contractual terms on straight
 line method over the contract period.
 
 Unbilled receivables represent revenues recognized from the bill cycle
 date to the end of each month. These are billed in subsequent periods
 as per the terms of the billing plans.
 
 Debts (net of security deposits outstanding there against) due from
 subscribers, which remain unpaid for more than 90 days from the date of
 bill and/or other debts which are otherwise considered doubtful, are
 provided for.
 
 Provision for doubtful debts on account of interconnect usage charges
 (IUC), roaming charges and passive infrastructure sharing from other
 telecom operators is made for dues outstanding more than 180 days from
 the date of billing other than cases when an amount is payable to that
 operator or in specific case when management is of the view that the
 amount is recoverable.
 
 10.  Investments:
 
 Current investments are stated at lower of cost or fair value in
 respect of each separate investment.
 
 Long-term investments are stated at cost less provision for diminution
 in value other than temporary, if any.
 
 11.  Borrowing Cost:
 
 Interest and other costs incurred in connection with the borrowing of
 the funds are charged to revenue on accrual basis except those
 borrowing costs which are directly attributable to the acquisition or
 construction of those fixed assets, which necessarily take a
 substantial period of time to get ready for their intended use. Such
 costs are capitalized with the fixed assets.
 
 12.  Licence Fees – Revenue Share:
 
 With effect from 1st August, 1999 the variable licence fee computed at
 prescribed rates of revenue share is being charged to the profit and
 loss account in the period in which the related revenue arises. Revenue
 for this purpose comprises adjusted gross revenue as per the licence
 agreement of the licence area to which the licence pertains.
 
 13.  Use of Estimate:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities and
 disclosure of contingent liabilities on the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting year. Differences between actual results and estimates are
 recognised in the periods in which the results are known / materialise.
 
 14.  Leases:
 
 a) Operating: Lease of assets under which significant risks and rewards
 of ownership are effectively retained by the lessor are classified as
 operating leases. Lease payments under an operating lease are
 recognised as expense in the profit and loss account, on a
 straight-line or other systematic basis over the lease term.
 
 b) Finance: Leased assets acquired on which significant risk and reward
 of ownership effectively transferred to the Company are capitalised at
 lower of fair value or the amounts paid under such lease arrangements.
 Such assets are amortised over the period of lease or estimated life of
 such assets whichever is less.
 
 15.  Earnings Per Share:
 
 The earnings considered in ascertaining the Company''s EPS comprises the
 net profit after tax, after reducing dividend on Cumulative Preference
 Shares for the period (irrespective of whether declared, paid or not),
 as per Accounting Standard 20 on Earnings Per Share, issued by the
 Institute of Chartered Accountants of India. The number of shares used
 in computing basic EPS is the weighted average number of shares
 outstanding during the period. The diluted EPS is calculated on the
 same basis as basic EPS, after adjusting for the effects of potential
 dilutive equity shares unless the effect of the potential dilutive
 equity shares is anti-dilutive.
 
 16.  Impairment of Assets:
 
 Assets are reviewed for impairment whenever events or changes in
 circumstances indicate that the carrying amount may not be recoverable.
 An impairment loss is recognized in accordance for AS-28 Impairment of
 Assets, for the amount by which the asset''s carrying amount exceeds
 its recoverable amount as on the carrying date. The recoverable amount
 is higher of the asset''s fair value less costs to sell vis-à-vis value
 in use. For the purpose of impairment, assets are grouped at the lowest
 levels for which there are separately identifiable cash flows.
 
 17.  Provisions & Contingent Liability:
 
 Provisions are recognized when the Company has a present obligation as
 a result of past events; it is more likely than not that an outflow of
 resources will be required to settle the obligation; and the amount has
 been reliably estimated. A contingent liability is disclosed where
 there is a possible obligation or a present obligation that may, but
 probably will not, require an outflow of resources.
 
 18.  Issue Expenditure:
 
 Expenses incurred in connection with issue of equity shares are
 adjusted against share premium.
 
 19.  Employee Stock Option:
 
 In respect of stock options granted pursuant to the company''s Employee
 Stock Option Scheme, the intrinsic value of the option is treated as
 discount and accounted as employee compensation cost over the vesting
 period.
 
 In respect of re-pricing of existing stock option, the incremental
 intrinsic value of the option is accounted as employee cost over the
 remaining vesting period.